Scriven Brothers & Co v. Hindley & Co [1913] 3 KB 564, King’s Bench Division

The plaintiffs instructed an auctioneer to sell by auction a large quantity of Russian hemp and tow. The auctioneer prepared a catalogue which did not distinguish between the hemp and the tow. Further, both lots were given the same shipping mark, ‘S.L.’. Lots 63–67 were the hemp and consisted of 47 bales and lots 68–79 were the tow and consisted of 176 bales. Prior to the sale, samples of hemp and tow were displayed in the show-rooms in Cutler Street. Opposite the samples of hemp was written in chalk ‘S.L. 63 to 67’ and opposite the samples of tow was written ‘S.L. 68 to 79’. The defendants’ manager, Mr Gill, inspected the hemp but not the tow (he was not interested in bidding for the tow). At the auction the defendants’ buyer, Mr Macgregor, bid for the 47 bales of hemp and these were knocked down to him. Lots 68–79 were then put up for sale and the defendants’ buyer bid £17 per ton for it (an extravagant price for tow). When the defendants discovered their mistake they refused to pay for the tow. The plaintiffs brought an action to recover the price of the tow. The defendants denied that they had agreed to buy the tow and claimed that the tow had been knocked down to them under a mistake of fact.

The jury made the following findings:

‘(1) That hemp and tow are different commodities in commerce.

(2) That the auctioneer intended to sell 176 bales of tow.

(3) That Macgregor intended to bid for 176 bales of hemp.

(4) That the auctioneer believed that the bid was made under a mistake when he knocked down the lot.

(5) That the auctioneer had reasonable ground for believing that the mistake was merely one as to value.

(6) That the form of the catalogue and the conduct of Calman [the foreman in charge of the show], or one of them, contributed to cause the mistake that occurred.

(7) That Mr Gill’s “negligence” in not taking his catalogue to Cutler Street and more closely examining and identifying the bales with lots contributed to cause Macgregor’s mistake.’

On this basis of these findings it was held that the plaintiffs were not entitled to recover the price of the tow from the defendants.

A.T. Lawrence J

In this case the plaintiffs brought an action for 476l. 12s. 7d., the price of 560 cwt. 2 qrs. 27 lbs. of Russian tow, as being due for goods bargained and sold. The defendants by their defence denied that they agreed to buy this Russian tow, and alleged that they bid for Russian hemp and that the tow was knocked down to them under a mistake of fact as to the subject matter of the supposed contract. The circumstances were these.

[he stated the facts and the findings of the jury as set out earlier, and continued]

Upon these findings both plaintiffs and defendants claimed to be entitled to judgment. A number of cases were cited upon either side. I do not propose to examine them in detail because I think that the findings of the jury determine what my judgment should be in this case.

The jury have found that hemp and tow are different commodities in commerce. I should suppose that no one can doubt the correctness of this finding. The second and third findings of the jury show that the parties were never ad idem as to the subject matter of the proposed sale; there was therefore in fact no contract of bargain and sale. The plaintiffs can recover from the defendants only if they can show that the defendants are estopped from relying upon what is now admittedly the truth. Mr Hume Williams for the plaintiffs argued very ingeniously that the defendants were estopped; for this he relied upon findings 5 and 7, and upon the fact that the defendants had failed to prove the allegation in paragraph 4 of the defence to the effect that Northcott knew at the time he knocked down the lot that Macgregor was bidding for hemp and not for tow.

I must, of course accept for the purposes of this judgment the findings of the jury, but I do not think they create any estoppel. Question No 7 was put to the jury as a supplementary question, after they had returned into Court with their answers to the other questions, upon the urgent insistence of the learned junior counsel for the plaintiffs. It begs an essential question by using the word ‘negligence’ and assuming that the purchaser has a duty towards the seller to examine goods that he does not wish to buy, and to correct any latent defect there may be in the sellers’ catalogue. Once it was admitted that Russian hemp was never before known to be consigned or sold with the same shipping marks as Russian tow from the same cargo, it was natural for the person inspecting the ‘S.L.’ goods and being shewn hemp to suppose that the ‘S. L.’ bales represented the commodity hemp. Inasmuch as it is admitted that someone had perpetrated a swindle upon the bank which made advances in respect of this shipment of goods it was peculiarly the duty of the auctioneer to make it clear to the bidder either upon the face of his catalogue or in some other way which lots were hemp and which lots were tow.

To rely upon a purchaser’s discovering chalk marks upon the floor of the show-room seems to me unreasonable as demanding an amount of care upon the part of the buyer which the vendor had no right to exact. A buyer when he examines a sample does so for his own benefit and not in the discharge of any duty to the seller; the use of the word ‘negligence’ in such a connection is entirely misplaced, it should be reserved for cases of want of due care where some duty is owed by one person to another. No evidence was tendered of the existence of any such duty upon the part of buyers of hemp. In so far as there was any evidence upon the point it was given by a buyer called as a witness for the plaintiffs who said he had marked the word ‘tow’ on his catalogue when at the show-rooms ‘for his own protection.’ I ought probably to have refused to leave the seventh question to the jury; but neither my complaisance nor their answer can create a duty. In my view it is clear that the finding of the jury upon the sixth question prevents the plaintiffs from being able to insist upon a contract by estoppel. Such a contract cannot arise when the person seeking to enforce it has by his own negligence or by that of those for whom he is responsible caused, or contributed to cause, the mistake.

I am therefore of the opinion that judgment should be entered for the defendants.